Driven by record sales of variable annuities, individual U.S. annuity sales had a record year in 2006 reaching $236.2 billion, up 9% over 2005, according to LIMRA International, Windsor, Conn. For the fourth quarter of 2006, individual annuity sales were $58.9 billion, growing 9% compared to the same quarter in 2005. Variable annuity sales were up 17%in the fourth quarter to $41.3 billion and up 17% in 2006 reaching $160.6 billion. This is the sixth straight quarter in which variable annuity sales increased when compared to the same quarter from a year ago.
Fixed annuity sales were down 4% for the quarter declining to $17.6 billion. At $75.6 billion, fixed annuities are down 5% for 2006 compared with calendar year 2005. Indexed annuity sales fell 15% from the fourth quarter of 2005 with sales of $5.5 billion.
Contributing to the decline in fixed annuity sales was an 11% decline in book value deferred annuity sales. Sales of market value adjusted annuities continued to show improvement compared to the same quarter from a year ago with sales increasing 80%, although they make up a much smaller segment of the fixed annuity market.
Among distribution channels, financial planners and independent broker-dealers had strong total sales growth in both fixed and variable annuities, up 31% overall for 2006, followed by stockbrokers and career agents at 14% and 11%, respectively. Banks increased variable sales 20% but had a decline of 14% in fixed sales for a net increase of 1%.
The results also showed changes in position among the top 20 writers of variable annuities, fixed annuities, and overall total annuities ( 2006 sales results ). In overall total annuity sales, Hartford Life (4th) and Prudential Annuities (8th) both moved up two positions while Riversource Life (10th) and New York Life (14th) both moved up one position. Aviva, which recently merged with The AmerUs Group, broke into the top 20 overall total annuity writers, coming in at the 19th position.
The top six variable annuity writers remained unchanged while Prudential Annuities (7th) and Riversource Life (9th) both moved up one position. Aviva moved into the 5th position for fixed annuity writers and Hartford Life (13th) continued improving their position in the fixed annuity rankings by moving up two positions.